Full Judgment
2. Both these appeals have been filed by the Collector of Central Excise, New Delhi on a common issue regarding the proper interpretation of Notification 175/86 dated 1.3.86 as to its applicability in cases where a factory registered with the Directorate of Industries shifts its location to another premises and continues to avail the benefit of the aforesaid exemption during the period when the registration is not with reference to the new address.
3. Both the respondents were registered with the Directorate of Industries and were availing the exemption under the aforesaid Notification when they were operating from their original premises.
When they shifted their factory to different locations they applied and obtained L-4 licence from the departmental authorities. As regards the requirement of registration with the Directorate of Industries as a small scale industry, they applied to the concerned authority for necessary change of address to be indicated in the certificates issued.
In the case of respondent M/s. Laxmi Ancillaries (P) Ltd. the original registration certificate was duly amended indicating their changed premises and returned to them. In the other case of M/s. Banarsi Das Sat Parkash a new certificate was issued on 10.8.92 but showing the date of commencement of production as 15.6.91 when their shifting to that premises had taken place. The Assistant Collectors concerned in both the cases held that the original registration certificate was not valid once the respondent had shifted to new premises and during the period before the amended certificate or the new certificate, as the case may be, were issued, the respondents were not eligible to get the benefit of exemption as they could not be held to be in possession of registration certificates issued by the Directorate of Industries certifying them to be small scale industries. The findings of the Assistant Collectors were set aside by the Collector (Appeals) by two separate orders by allowing appeals filed before him. The orders in appeal have been challenged by the department in the present appeals raising common grounds. It is urged in the appeals that once the location of the factory is changed, the SSI registration is not valid as Clause (1) mentioned on the SSI certificate says that the registration is valid for the address for which the unit is registered as SSI Unit. On this ground it is contended that the benefit of para 4 of Notification 175/86 is not available to the respondent. Another ground raised in the appeal is that the benefit of para 4(b) cannot be extended to them as the words used therein are "were a manufacturer who is manufacturing specified goods in a factory" and the factory after change in location does not remain the same.
4. On behalf of the appellant Collector. Shri S. Nunthuck. learned DR pleaded that the impugned orders in appeal may be set aside accepting the grounds raised in the appeals which he reiterated. He stressed the point that the respondent cannot be said to be registered with the Directorate of Industries as required under the Notification during the intervening period when they had shifted their premises and before they got valid registration certificate for their new premises.
5. The arguments were resisted by learned Counsels Shri J.S. Agarwal who represented M/s. Laxmi Ancillaries (P) Ltd. and Shri V.K. Gupta who represented the other respondent M/s. Banarsi Das Sat Prakash. They referred to the various decisions of the Tribunal on the question of continued availability of benefit of exemption under the aforesaid Notification notwithstanding the change of address. The decisions cited by them included the following cases:--SYN Pack Pvt Ltd. v. CCE. Bombay-II They pleaded that the impugned orders in appeal may be upheld and the department's appeals dismissed.
6. The aforesaid decisions cited are placed before us. We have perused the record and also the decisions relied in support of the impugned order. We agree with the approach taken by the Tribunal in the S.K.Engineering & Trading case. The exemption notification in question is with reference to a manufacturer and the location of the factory being changed should not result in denial of the exemption being availed.
Change of registration of the address in the registration certificate issued or issue of a fresh registration certificate by the concerned Directorate of Industries would not leave the intervening period prior to the date of issue of such amendment or certificate, as the case may be, uncovered. Moreover, we are also not convinced by the alternative ground raised in the appeal that benefit of para 4(b) cannot be extended to the respondents in these cases as the words used are "where a manufacturer who is manufacturing specified goods in a factory" and that the factory after change in location does not remain the same. It would be seen that paragraph 4 lays down the requirement of registration as a small scale industry with the concerned officer of the State Government, the Directorate of Industries or Development Commissioner, as the case may be, as a condition for availment of the exemption but these conditions stipulated in that paragraph are qualified by the proviso there under in terms of which that requirement of registration will not be necessary. Under Clause (a) the requirement stands relaxed if the value of clearances in the particular year or the previous year was less than Rs. 7.5 lakhs. The alternative relaxation from the requirement of registration is available under Clause (b) which covers a case where the manufacturer manufactures specified goods in a factory which is not registered with the Directorate General of Technical Development in the Ministry of Industry and has been availing of the exemption under this notification during the preceding financial year. It is a clear fact that respondents were availing of this exemption in the preceding financial year. If it is considered that after the shifting of the factory premises to a new location, there is no registration available then the case will still be regulated in terms of proviso (b) since the respondents had been availing of the exemption in the preceding financial year duly armed with the certificate for the original location. Merely because the premises have been shifted it cannot result in the denial of the benefit of exemption since the exemption is available to a manufacturer and this is not limited to his activity in a particular factory. If the manufacturer has got factories in more than one location or has been clearing goods manufactured from factories situated in different locations within a particular financial year, the only criterion for deciding the eligibility of exemption would be the total value of clearances of specified goods effected by a manufacturer from one or more factories.
It is not the department's case that the value of clearances had exceeded the exemption limits. Exemption has been denied only on the ground that they did not satisfy the requirement of paragraph 4 in the sense that they were not having a proper registration certificate with reference to their changed address. This objection taken by the Assistant Collectors had been correctly overruled by the Collector (Appeals). We are in agreement with the approach taken by him. We uphold the orders in appeal and dismiss the appeals of the department.